GLG Partners, the London-based hedge fund firm owned by Man Group, and a former holding company have agreed to pay nearly $9 million to the US Securities and Exchange Commission for overvaluing assets in a Siberian mining company.
GLG Partners, the London-based hedge
fund firm owned by Man Group, and a former holding company, have agreed to pay
nearly $9 million to the US Securities and Exchange Commission for overvaluing
assets in a Siberian mining company.
The SEC accused GLG of overvaluing
the firm from 2008 to 2010, which resulted in investors paying excessive management
and administration fees. The authority also accused the firm for failing to investigate when concerns were raised
about the inflated price.
According to the SEC, the GLG Emerging Markets Special Assets 1
paid $210 million for a 25 per cent stake in an unnamed emerging market coal mining
company as a result
of internal control failures.
The SEC said that after the fund's
independent pricing committee valued the stake at $425 million, GLG employees received
information on a number of occasions calling this amount into question.
The US regulator added that confusion about
who should address these issues and inadequate policies and procedures meant
that the pricing committee failed to receive this information in a timely
manner or even at all.
As part of the settlement, GLG agreed
to pay $7.7 million to cover fee charges, civil penalties totaling $750,000
and $438,000 in interest charges.
The firm has also agreed to hire an
independent third party consultant to review procedures for the valuation of
assets. GLG did not admit or deny any wrongdoing, the SEC said.